With 2020 elections making headlines across the country, San Jose legislators recently debated disclosing the costs of bond measures as prompted by a controversial state bill.
Assembly Bill 195, a bill approved in 2017 by former Gov. Jerry Brown, requires all ballot measures to have 75-word blurbs describing the amount of money to be raised annually, the tax rate and duration of the tax. The idea, proponents said, is to provide voters “a true and impartial synopsis of the proposed measure.” A second piece of the bill — a budget trailer bill, SB 863, which would have put a temporary suspension on the enforcement of AB 195 through the 2020 elections — was not passed.
As it stands now, AB 195 is law — but city officials, like San Jose Mayor Sam Liccardo, are pushing state lawmakers to suspend the bill until a revised version of SB 863 is passed with it. The San Jose City Council discussed AB 195 during a council meeting last week as part of a quarterly report on the city’s legislative priorities.
“AB 195, while well intentioned, is about providing disclosure to voters so there is trust that the government entity will use money the way it is intended to be used, and voters will know what they’re paying for,” Liccardo said during the meeting. “The problem is, implicit in AB 195, a mechanism that will ensure that no agency can maintain that trust because we’re required to state a cost to the bonds that, in most cases, will be wrong, and is only an estimate and can only be an estimate, because of changing durations for the bond, as well as interest rates.”
In the report on legislative priorities, city administrators recommended opposing efforts that “inhibit” the city’s ability to issue bonds or increasing reporting duties. The council accepted the report, with Councilman Johnny Khamis casting the lone dissenting vote.
Khamis expressed concerns about “bond secrecy” and withholding information about the costs of tax hikes and bonds before taxpayers vote to approve new taxes. In some cases, they might not even be aware a measure would raise taxes.
“I know that 75-words isn’t a lot, but I think it can be squeezed in,” Khamis said during the meeting. “It will potentially remove the requirement of telling taxpayers how much it’s going to cost them in the first 75 words. And I can tell you, many people don’t read past those 75-words.”
Khamis told San José Spotlight in an interview Wednesday that if state legislators approved a suspension of AB 195, taxpayers would be in the dark about proposed bond measures and their tax implications.
“Before 2017, that was not the case. Municipalities would put whatever they want,” Khamis continued. “Why would you suspend letting taxpayers know about new taxes? Why would you suspend telling people that this ballot measure would cost them money?”
But Liccardo said it’s going to be difficult for cities — including San Jose — to comply.
“We can’t possibly tell the voters accurately what they’re going to pay when we know that amount is going to change based on interest rate and market risk,” Liccardo said.
In an interview Wednesday, Vice Mayor Chappie Jones also expressed his opposition to AB 195 in its current state.
“I think it should be changed. I know that not only for the city, but particularly for the school districts, it creates a burden on them to have a more detailed explanation of what their bond measures are on a ballot,” Jones said, but added his support of increasing available information on legislative measure for voters.
But Khamis warned that the bill offers vital information to voters, printed directly onto their ballots. Withholding such information, Khamis warned, new taxes will be “easier to pass” without giving voters an honest look at the implications.
When AB 195 language is added, recent polling found many bonds see a drop in support of 10 percent or more, which pushes the measures below the threshold required for passage.
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